Chicago’s New Outlet Mall Setting a Trend

Scott Baltic/Commercial Property Executive—Although the new Fashion Outlets of Chicago opened only last Thursday, Aug. 1, there are already nearly 30 comments, some of them quite lengthy, on that compendium of all things retail-y, Yelp.com.

In all, the outlet center, in Rosemont, Ill., very close to O’Hare International Airport, got middling grades for its opening weekend. Commenters typically thought it’s big enough to have a good range of stores, from mid-market to higher-end, but not so big it’s overwhelming. Ironically and unsurprisingly, no one liked the crowds and lines, and most commenters mentioned hating the parking set-up.

Developed by AWE Talisman and Macerich, the $250 million, 530,000-square-foot, two-level center is anchored by Bloomingdale’s The Outlet Store, Last Call by Neiman Marcus, Saks Fifth Avenue OFF 5th and Forever 21.

Others among its 130 stores include outlet locations from high-fashion retailers Gucci, Tory Burch and Barneys New York. In addition, the mall is home to the first outlet stores in metro Chicago for several brands, including Longchamp, Vince Camuto, Ports 1961 and L’Occitane.

As valuable as Yelp’s commentariat can be, a more-expert take on the mall’s concept is appropriate, and for that Commercial Property Executive turned to retail consultant Jeff Green, president & CEO of Jeff Green Partners.

Green highlights the mall’s outstanding location, near the intersection of I-90 and I-294, noting that FOC has ”one of the most densely populated trade areas of any outlet mall in the country.”

The only outlet mall he could compare it to in that respect is the Citadel Outlets in Los Angeles, one of the best-performing outlet malls in the United States.

FOC’s website touts its ease of access, which includes regular shuttles to and from O’Hare, as well as downtown hotels. In addition, the center is accessible by CTA elevated trains, with a free shuttle from the nearest stop to the center itself.

Outlet malls have been moving ever closer to urbanized areas, Green said. The first locations were greenfield sites well out of cities and/or near tourist areas. Outlet malls gradually moved to exurban sites and are now taking hold in inner suburbs, he added.

Green also suggests that customers are less likely these days to have the time to take a long drive and spend much of a day shopping at an outlet center.

(Some of those Yelp comments bolster Green’s observation. One Yelper liked that the mall is not “in the middle of bufu” like most outlet malls.)

Another strategic observation Green offers is that although “outlet malls continue to be a pretty hot sector,” there is some danger of overbuilding, especially if the economy continues to turn upward and shoppers’ tastes turn back toward mainstream retailers.

He points out that FOC is Macerich’s first foray into outlet malls and also notes Simon’s recent acquisition of Chelsea Premium Outlets.

Nonetheless, given its appeal to both local customers and travelers, FOC doesn’t look to be vulnerable, Green concluded.

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Jeff Green Partners was founded in May of 2004 in response to a growing demand for a new level of expert consulting services in the retail real estate marketplace. Led by President and CEO Jeff Green, Jeff Green Partners provides a full spectrum of analytical and interpretive services for property owners and developers.